SAN JOSE—The U.S. Attorney’s Office announced that a former VP for Netflix was convicted of fraud & bribery charges on Friday, April 30. A federal jury found him guilty of receiving stock options and more than a half-million dollars in bribes and kickbacks. The indictment began in 2018 and the trial began April 19 in which the jury found him guilty on 28 of the 29 counts.
Micheal Kail, 49, was indicted on 19 counts of wire fraud, three counts of mail fraud, and seven counts of money laundering. Prosecutors allege that Kail accepted more than $500,000 in kickbacks and valuable stock options in return for approving millions of dollars in contracts from nine tech companies seeking to do business with Netflix between February 2012 and July 2014.
In order to receive kickback payments from Netflix technology providers such as Netenrich, Platfora, Sumo Logic and Netskope, Kail created a shell company known as Unix Mercenary LLC to fund personal expenses and used these bribes to buy a house in Los Gatos, California.
Authorities noted that Netflix requires its employees to disclose actual or apparent conflicts of interest, and to report gifts from people or entities seeking to sell to the company. U.S. Attorney Stephanie Hines said in a press release, “Michael Kail wielded immense power to approve valuable Netflix contracts with small tech vendors and he rigged that process to unlock a stream of cash and stock kickbacks to himself.”
Kail faces 20 years in prison for each fraud conviction and 10 years in prison for each money laundering conviction. Netflix absorbed the financial damages caused by Kail resulting in the $18 that customers must pay now. He is expected to file an appeal over the ruling made in court.